The deal was confirmed to Vida Imobiliária by Pedro Coelho, Square AM’s vice-president, which acted on behalf of real estate investment fund CA Património Crescente. «We have a long-term investment strategy for this fund, which is very clear: to diversify, without being over-exposed to any sector or tenant and to select well located quality assets with solid tenants and long-term contracts. This is an asset that, not only has all these attributes, but which was also acquired at a very competitive price, providing us the guarantee of having potential for a future valuation», he commented.
Acquired from Sonae Capital, the asset is located in Avenida da Boavista and is constituted by three buildings: five-star hotel Porto Palácio Hotel & Spa and two office buildings: WTC and Boavista. «For 62.5 million euro we bought a 48.000 sqm asset with prestigious tenants with long-term contracts. We purchased an asset with very solid fundamentals at an average price of 1.300€/sqm, significantly below its replacement cost», he revealed.
Seen as «the main asset», the 262 room five-star hotel is leased to Grupo Sonae for 20 years, and it represents the largest share of the transaction, «around 37 million euro, meaning that the hotel was acquired at a price close to 150.000 euro per room, which is a very competitive price, especially for an asset with this quality and prestige», advanced Pedro Coelho. «If we look at comparable assets within this market, there are news of three-star hotels being traded for these amounts (in terms of €/room), whereas the last two five-star hotels to be sold in Porto were traded at an average price of 500.000€/room so, we have to admit there is a significant margin to obtain good revenues with this asset in the future».
The remaining 25.5 million euro correspond to the two office buildings which have a total combined area of almost 17.000 sqm and have, among their tenants, several companies from grupo Sonae with ten-year leases.
«This is a long-term bet», guaranteed Pedro Coelho, adding that «the conclusion of this deal disproves the theory from many investors, that in Portugal everything is becoming too expensive».
This is the third known operation within the last few weeks involving the sale of hotels in Portugal, and it took place only a few days after the announcement of another big deal: Azora’s purchase of two Tivoli hotels in Algarve from Mint for 148 million euro.